"The Drillers Strike Back" - The Story of Nabors Industries.

I got a lot of financial history on a lot of energy companies but hands down I think the toughest businesses are the refiners on the downstream side and on the upstream side of things it is clearly the drillers.

An integrated oil company has both up and downstream to ride out the cycles.

An E&P can theoretically go into blow-down mode and even though investors hate it they have the option of hedging production.

An oilfield service company can just choose not to become acquisitive (they often buy at peaks).

But a driller - drillers require a ton of capital.

As new reserves are found quite often they require new techniques, equipment and up to date rigs to exploit and develop new reservoirs.

The rigs used in the early days of PA were not the rotary rigs of today but rather percussive tools that picked up and dropped the drill bit into the well - think hammer and nail.

As activity moved to Texas and Baku rotary rigs were perfected because under the percussive method sand would quickly fill the well bore.

Fast forward to the late 1960’s/1970s and rigs now had to operate and withstand the extreme cold of Alaska and Canada.

And this is where our story of Nabors begins.

NBR actually began as a small Canadian and Alaska drilling outfit with just a handful of rigs as shown below with rated drilling depths of ~10k-18k feet.

Source; Nabors Annual Reports